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AI big shot Andrew Ng\u2019s AI Fund, a startup incubator that backs small teams of experts looking to solve key problems using AI, plans to raise upwards of $120 million for its second tranche. <\/p>\n
A filing<\/a> with the SEC shows that the AI Fund\u2019s second fund, AI Venture Fund II, has so far amassed $69.75 million from 13 partners \u2014 leaving around $50 million to be invested. The AI Fund\u2019s PR declined to comment. <\/p>\n Ng, the founder of the Google Brain deep learning project, co-founder of Coursera and recent Amazon board appointee<\/a>, was one of the most recognizable names in the AI community when he became Baidu\u2019s chief scientist in 2014. He left Baidu in 2017 to jumpstart a number of AI ventures, including the\u00a0Deeplearning.ai<\/a>\u00a0course and\u00a0Landing AI<\/a>, a startup developing AI tools targeting manufacturing companies. <\/p>\n Ng launched<\/a> the AI Fund in 2018 with $175 million, serving as the incubator\u2019s GP and leading its direction. (On the aforementioned SEC filing, he\u2019s named as the \u201cmanaging partner of the general partner\u201d for AI Venture Fund II.) The idea was to provide funding at the seed and series A stages of a company\u2019s lifecycle, allowing teams to work in relative stealth until they were ready \u2014 and connecting them with Ng\u2019s extensive professional network.<\/p>\n Greylock Partners, New Enterprise Associates, Sequoia Capital and SoftBank Group were among the AI Fund\u2019s initial backers. Crunchbase lists<\/a> 38 portfolio companies, including AI observability platform WhyLabs<\/a>, Ng\u2019s own Landing AI and AI app-building tool Baseten<\/a>. <\/p>\n At $120 million, AI Venture Fund II would be considerably smaller than the first AI Fund tranche. Still, it\u2019s more than double what Ng reportedly<\/a> originally hoped to raise \u2014 $50 million \u2014 for the AI Fund\u2019s follow-up.<\/p>\n Take it as another potential sign that the AI bubble \u2014 particularly the buzzy generative AI segment within it \u2014 may be deflating. <\/p>\n Pitchbook recently reported<\/a> that, for two consecutive quarters, generative AI dealmaking at the earliest stages has declined, plummeting 76% from its Q3 2023 peak. VC deal value for pre-seed and seed-stage deals fell in Q1 2024 to $122.9 million, down from Q3\u2019s high of $517.7 million.<\/p>\n Enterprise reluctance could be to blame. <\/p>\n In a\u00a0pair of recent surveys from<\/a>\u00a0Boston Consulting Group, about half of the respondents \u2014 all C-suite executives \u2014 said that they don\u2019t expect generative AI to bring about substantial productivity gains and that they\u2019re worried about the potential for mistakes and data compromises arising from generative AI-powered tools. As my colleague Ron Miller wrote last week<\/a>, businesses are finding that generative AI is harder to implement at scale than they once assumed \u2014 and that execs are exercising caution.<\/p>\n<\/div>\n